Mega: Inside the mansion and the mind of Kim Dotcom

At its peak, Kim Dotcom's company Megaupload carried 50 million passengers a day, four per cent of global internet trafficWilk

Kim Dotcom

Kim inside his New Zealand mansion

Wilk

This article was taken from the December 2012
issue of Wired magazine. Be the first to read Wired's articles in
print before they're posted online, and get your hands on loads of
additional content by subscribing online.

Please choose one of the following statements:

A) Kim Dotcom is not a pirate. He's a hero. The saviour of
my online liberties. A visionary digital entrepreneur. His
company, Megaupload, was a legitimate data-storage business used by
hundreds of millions of individuals. The raid on his New
Zealand home was excessive and illegal. Hollywood is terrified by
the digital future, and an innocent paid the price. Kim is a
martyr. But Kim will triumph. You'd like him, he's cool.

B) Kim Dotcom is a pirate. A megalomaniacal gangsta clown. His
Megaupload enterprise wilfully made hundreds of millions of dollars
from stolen movies, songs, video games, books and software. Oh
yeah, AND he couldn't be more obnoxious about it. He wanted Wired
to write a nice story about him, so he manipulated its writer by
providing exclusive access and even a few tears. Like any pirate,
the only freedoms he cares about are the ones he can exploit
to make himself rich. If you think he's cool, you don't know
him.

C) Kim Dotcom is rich enough to work however and wherever he wants. And what he
wants is to work from bed.

His bed of choice is a remarkable piece of custom Swedish
craftsmanship made by a company called Hästens. Each one takes some
160 hours to produce and is signed by a master bed-maker who lays
out the most perfect matrix of horsehair, cotton, flax and wool.
Price after custom framing: £64,000. Kim has three such beds in his
New Zealand mansion, one of which faces a series of monitors
and hard drives and piles of wires and is flanked on either side by
lamps that look like, and may well be, chromed AK-47s.

This is Kim's "work bed" and serves as his office. It was
here that he returned in the early morning of January 20, 2012,
after a long night spent down the road at Roundhead Studios, laying
down beats for his album (one of many side projects) with
songwriter Mario "Tex" James and Black Eyed Peas producer Printz
Board. They finished around 4:30am. On the ride back to his mansion
in his Mercedes S-Class, Kim noticed headlights behind them.
He said to his driver: "I think we're being followed."

The FBI also believed Kim possessed a special portable
device that would wipe his servers across the globe, destroying the
evidence. They called this his doomsday button

They pulled into Kim's rented palace around dawn. His wife
and children were long asleep in another wing. Kim walked to his
upstairs chambers, showered and changed into his
customary all-black sleeping costume, grabbed his customary
chilled Fiji water from the upstairs fridge and settled before
the monitors of his work bed. Then he heard the noise.

Kim guessed it was his helicopter. He didn't bother with
details, he had a staff for that, but he did know that VIPs from
the entertainment world were expected in from LA in
celebration of his 38th birthday. Maybe they'd arrived early and
Roy, his pilot, had been dispatched to meet them. The helicopter
theory was confirmed by the sound of rocks from the limestone drive
raining against the windows. Fucking Roy! He'd been told not to
land too near -- the thought was interrupted by a boom, echoing and
close.

This noise was coming from the other side of his office door. It
was heavy hardwood several centimetres thick, secured by stout
metal bolts in the stone casement. Kim struggled to his feet as the
door shook and heaved on its hinges. Someone or something was
trying to break through. Now Kim heard other noises, shouts and
bangs and the unmistakable stomping of boots on stairs. Intruders
were in the house. Kim Dotcom realised he was under attack.

Across an ocean, hours before Operation Takedown began, the US
Department of Justice (DOJ) had already tipped off a select group
of journalists about the raid's planned highlights. If you
know nothing else about Kim Dotcom, about the federal case against
him and his former online business, Megaupload, you've
probably heard about the raid. The story played out like a
Hollywood blockbuster. The scene: New Zealand. Lush and green and
far away, home to the villain: Kim Dotcom, né Kim Schmitz, aka
Tim Vestor, Kim Tim Jim Vestor, Kimble, and Dr Evil.

A comic-book baddie, an ex-con, expatriate German ex-hacker
lording over his own personal Pirate Bay just 30 minutes north of
Auckland. Kim Dotcom was presented as a big, bad man,
larger-than-life, larger than his two-metre, perhaps 160kg frame.
We saw him pose with guns and yachts. We watched him drive his
nitrox-fuelled Mega Mercedes, throwing fake gang signs at rap
moguls, making it rain with $175 million (£110 million) in
illicit dotcom booty.

His alleged 50-petabyte pirate ship was megaupload.com, a
massive vessel carrying, at its peak, 50 million passengers
a day, a full four percent of global internet traffic.
Megaupload was a free online storage locker for files too bulky for
email. It generated an estimated $25 million a year in
advertising revenue and brought in another $150 million
through its paid-for Premium service.

The DOJ maintains that the legitimate storage business was a
front, that Megaupload was a mega-swapmeet for some $500 million of
pirated material. The FBI also believed Kim possessed a
special portable device that would wipe his servers across the
globe, destroying the evidence. They called this his doomsday
button.

Operation Takedown was carried out by armed New Zealand special
police and monitored by the FBI via video link. Descriptions of the
raid varied from one news outlet to another, but most included the
cops' dramatic helicopter arrival and their struggles with a
security system fit for a Mafia don. News reports would later claim
that police were forced to cut their way into Dotcom's panic room,
where they found him cowering near a sawn-off shotgun. [There was,
indeed, a shotgun stored there, but in a safe about ten metres
away. And Kim wasn't hidden - his frame was easily visible behind a
pillar.]

This was justice on an epically entertaining scale: the boastful
pirate king brought down. That same day, similar raids took
place in eight other countries where Megaupload had servers or
offices. Kim was cuffed and put in jail, his booty seized, his
business scuttled upon the reefs of anti-racketeering laws. If all
went as planned, he and his six generals would be extradited
to the US to face a Virginia judge and up to 55 years each in
prison. The message was, if it could happen to him, it could
happen to anyone. Justice was served, the end, roll credits. Yes,
it was a great story.

The only problem was, it wasn't quite true.

The £15 million Dotcom Mansion is said to be New Zealand’s most expensive home, with a security system fit for a Mafia donWilk

Kim Dotcom's head of security is waiting for Wired at Auckland
Airport on a grey day in July. Wayne Tempero is easy to spot. Amid
the limo drivers and families with Mylar balloons is one deadly
serious shaven-headed New Zealander with a lantern jaw --
a tattooed wall of muscle wearing a tight black
hoodie. He specialises in military hand-to-hand combat and
looks like a very nice person who'd be very handy with a knife.

The car is waiting just outside. Not the Lamborghini or pink
Series 62 Cadillac or any of the three retrofitted Mercedes CLK
DTMs with extra-wide seats -- the cops had impounded those. This is
just a modest black Mercedes G55 AMG Kompressor with the licence
plate KIMCOM. "I think I was followed on my way here," says
Tempero. In fact, everyone in Kim's entourage assumes
everything is monitored, including all their
communications. Tempero is the one facing gun charges after
the raid - the shotguns were registered in his name - and he
doesn't need any more problems with the police. "Maybe we're
all a little paranoid these days," he says with a grin as he
edges up to the speed limit for the drive.

Until just two months ago, Kim couldn't live in his own
home, as a condition of his house arrest

The Dotcom Mansion is impossible to miss, mostly because of the
chromed industrial-park letters spelling out DOTCOM MANSION
across the gatehouse in blue backlighting. It's said to be the
island nation's most expensive home. The limestone drive winds up
to a £15 million suburban castle with ponds, a tennis court,
several pools, a Vegas-style stairstep fountain and a maze. The
surrounding lawns are manicured and impossibly steep.

Until just two months ago, Kim couldn't live in his own home, as
a condition of his house arrest following a month of jail time. For
three months he was confined to the guesthouse, a prison of black
lacquer, black leather, black Versace tables and wall-sized
LCD flatscreens. The walls are adorned with poster-sized
photographs of Kim and his beautiful 24-year-old wife, Mona, but
mostly just Kim: Kim reeling in a great fish, Kim on the bow of a
luxury yacht, Kim in front of a European castle holding a shotgun
and a limp duck, or straddling a mountaintop, eyes pinned on the
distant future. The effect is more Kim Jong-Il than Kim Dotcom.
Dotcom -- or the iconic character of Dotcom -- is everywhere here,
but most of the 53 members of staff that maintained the larger
estate are gone, along with his seized fortune.

Self-promotion machine Kim Dotcom poses with former girlfriend Janina Youssefian and megayacht Amnesia in the British Virgin Islands Wilk

Tempero says that the boss had just gone to bed shortly before I
arrived at dawn. There's no telling when he'll be awake. Kim has
surrounded himself with luxury, but what he prizes above all other
indulgences is pure, deep sleep. He simply doesn't always like to
get up in the morning, and he doesn't always like going to bed at
night, and -- here's the kicker -- he doesn't have to. The Sun is
up or down -- who cares? It is always dark somewhere. And it is
always night in the Dotcom Mansion. Great black curtains shut out
the light, thick stone walls block the sound. In his sleeping
chamber there are no electronic things, no humming or beeping
devices, no leaking of LED. For sleep of the finest quality, for
pure luxury slumber, total silence is required. The gardeners do
not mow, the cleaners do not clean. The cooks chop quietly in other
wings, the nannies tend the children in another house. When he
sleeps the mansion holds its breath. Kim can't provide a
schedule.

"I usually just watch his Twitter," Tempero says. It's late
afternoon before Kim's tweets start pouring forth. He announces
updates on the coming court hearings, plugs his new pop single -- a
catchy duet with his wife called "Precious" -- and a music video
featuring home footage of the five Dotcom kids, including hospital
shots of the arrival of his new twins only months before. Other
messages in the stream address Julian Assange or internet freedom
or the tyranny of the FBI.

A few minutes later Tempero is at my door. The boss is up.

I find Kim behind the wheel of his golf cart, layered in his
usual uniform of black fleece over diaphanous black shirt and
three-quarter-length trousers, a black scarf and heavy black
leather ball cap. Despite his blue-tinted Cartier sunglasses, his
eyes squint against the sunlight. Spotting me, he motors over
and extends a fist bump.

"Wow, you look like a Viking," he says, meaning probably that
I'm blond and tall like him. His English is precise and tinged
with a German-Finnish accent. "Cool!" Then he zips away on a golf
cart that has been hacked to top 50kph. I follow to what Kim
calls his hill, where he can soak in a few minutes of precious
winter sunlight.

At this time of year Kim and family would usually be based out
of their floor-wide residence in the Grand Hyatt Hong Kong, or on a
rented yacht off the shores of Monaco or St Tropez. The raid has
enforced a Hotel California-style house arrest. But Kim has reason
to hope that his adopted home might aid his cause. In a few days he
will be in court for a much-expected showdown with prosecutors
about the excesses of the raid on his home. It's a sideshow ahead
of the extradition hearing in March -- but a sideshow that might
determine Kim's fate.

In recent weeks, New Zealand Crown judges have pushed back
against the DOJ, ruling that the search warrant on Kim and the
removal of his personal hard drives under the guidance of the FBI
were illegal. Still, the jeopardy is daunting -- up to 55
years in jail for alleged crimes including conspiracy to commit
copyright infringement, money laundering and racketeering. "They're
treating us like a Mafia, man!" Kim says. "It's unbelievable. It's
only because they cannot extradite us to the US just for copyright
violation. If they treat us as some sort of international criminal
conspiracy, they can.

The "us" Kim is referring to are his six codefendants, his
partners in Megaupload. Andrus Nomm, a resident of both Turkey
and Estonia, was captured in Holland; Sven Echternach escaped to
his home in Germany (which does not extradite its citizens); and
Julius Bencko of Slovakia remains at large. The other three -- Bram
van der Kolk, who oversaw programming; Finn Batato, the
company's chief marketing officer; and Mathias Ortmann, its chief
technical officer, cofounder and director -- were, like Kim, caught
in New Zealand.

At this point, all that stands between the men and their fate
are legal teams and Kim himself. Sure, the Department of Justice
case cites a handful of seized emails that sound damning, but it
was Kim who got them here. Dotcom has in the past compared
himself to Bill Gates, Steve Jobs and Martin Luther King Jr. He was
the visionary. Now he'll need to think his team out of this
jam. And he promises he will.

He has a plan -- something even bigger and better is in the works. It's more
mega than Megaupload. A technology nobody can touch. One that will
change the world. They'll beat the Department of Justice. They'll
humiliate them. And then, Kim promises, they shall have their
vengeance.

The sun sets in early winter. We file back down the hill to the
warmth of Kim's house-sized kitchen beside a five-metre-long fish
tank. A young Filipino maid brings Kim a facecloth and water.

Kim (far right) with his Megaupload team (left to right) Bram van der Kolk, Finn Batato and Mathias Ortmann, in the dock at North Shore District Court, Auckland, New ZealandWilk

Kim maintains that the real issue is a lack of understanding of
the internet. He was simply operating a hard-disc drive
in virtual space. There's no arguing that Megaupload wasn't a
legitimate cyberlocker, storing data for millions of individuals.
Megaupload server logs show addresses that trace back to Fortune
100 companies and governments around the world. It's also obvious
that Megaupload was one of many websites that stored, and profited
from, copyright-infringing material. The question is whether Kim
and company bear criminal responsibility for that duality.

The law addressing this balance between the rights of copy-right
holders and internet service providers was signed by President
Clinton in 1998. The US Digital Millennium Copyright Act (DMCA)
provides ISPs with "safe harbour" from liability, so long as the
provider doesn't know for certain which, if any, of its stored
material is copyright-infringing and "expeditiously" removes
infringing material following a takedown notice.

The act was tested in June 2010, when a US district court ruled
that YouTube was protected by safe harbour against a $1 billion
suit by Viacom; Google employees simply could not be expected to
make tough, and often impossible, calls as to which clips of, say,
Jersey Shore, had been uploaded without permission.

The DMCA was intended to clear up the grey areas of internet
law. But by making ignorance of its own business a cloud storage
provider's only defence, the law created a brand-new grey area,
leaving in place an internet where piracy was blatant big
business.

The world still hadn't worked out how to have data storage that
was both private and policed. Lawmakers attempted to tackle
that issue this year with the Stop Online Piracy Act (SOPA) and
Protect IP Act (PIPA) measures, but millions of internet freedom
advocates shouted it down and on January 20 the legislation died;
Kim was raided that same week. "The US showed they don't need
SOPA or a trial to control the internet," Kim says. "They did
it with guns."

The DOJ claims Megaupload was anything but ignorant of the
pirated material on its site. In fact, the indictment claims,
Megaupload's generals engaged in illegal file-sharing themselves,
encouraged it with an incentive programme that paid cash for
popular content, and were slow and selective in complying with
takedown notices, only pulling infringing content and dropping the
incentive programme when the company was at the peak of its power.
Megaupload counters that policing the billions of files on its
service would be both impossible and a violation of
their customers' privacy, that they did their best to comply
with takedown notices as the law required, and that they had
reasonable expectations of the same DMCA safe harbour afforded to
YouTube.

As a child, Kim's difficult behaviour landed him in a
psychiatrist's chair: he stole the doctor's wallet and took his
friends out for ice cream

But unlike the Viacom versus YouTube case, the charges against
Megaupload are not civil but criminal; the key players aren't being
sued, they're facing jail. Does safe harbour even apply in a
criminal case? It's not clear that a criminal statute
against second-party copyright violation even exists. Welcome
to the greyest grey zone on the internet.

At the heart of the DOJ's case is the concept of "willfulness".
It's a question of whether the Megaupload boys knew they
were criminals. And for that reason, much of the focus has
been on the character of Kim Dotcom himself.

Dotcom does have several criminal convictions in Germany and a
bad-boy reputation. What's less clear is whether this patchwork
description makes Dotcom a Don Corleone or a Da Vinci. "They
probably thought, this guy's fucking crazy and illegal, and we will
find so much shit on him once we open it up," Kim says. "They
thought I was an easy target. But they underestimated me, man.
Everything they're saying about me is ten years old. I'm the
cleanest guy out there."

Dotcom wipes the sweat from his forehead and refolds his black
facecloth. "That's the funny part of all this. Everyone thinks they
know me. But nobody really knows me at all."

The first time Kim was sent to jail he was just 19. The charge
was handling stolen goods, but it wasn't as simple as that; the
German court simply didn't have a word for this new crime of
hacking.

He grew up in the northern German city of Kiel with his mother
and alcoholic father, who would beat his mother while drunk or
dangle young Kim over the balcony, Michael
Jackson-style.

The kid who emerged from this childhood was smart, wilful,
unafraid of adults and unimpressed with their authority. He didn't
have much interest in school, preferring to sleep late and skip
class. He says his difficult behaviour landed him in a
psychiatrist's office. The man gave him some tests; Kim
stole the doctor's wallet and took his friends out for ice
cream.

He was around 11 when he saw his first Commodore C-16 in a shop
window, running a demo of some pixelated game. He hectored his
mother until she bought it for him. It sat on his desk, a puzzle
asking for his solution in BASIC, interesting in a way that school
never could be. A friend had a tool called ICE on a floppy disk. It
allowed him to make copies of games, simply by removing a line of
code.

Nobody called that piracy. The point was unfettered access. The
point was the possible. One of Kim's schoolmates had described an
online Shangri-La called X.25 -- basically a pre-internet closed
network. Kim bought himself a 2400-baud modem, the kind where you
stick a phone handset into a rubber coupler. "X.25 was quite hard
to get into," says Kim. "You needed the code, but once you got in,
the people there were very open about how to hack various things,
sharing access numbers, speaking freely." Kim sat lurking,
absorbing the information. But before long he started his own
attacks.

One of the recurring hacks was a backdoor attack on corporate
PBX systems -- a company's internal phone and data exchange. "Back
then, very few admins even knew how to change the default
passwords," he says. "It never occurred to them that a kid might
try to break in. It was like moving to some little Swedish village
with no locks on the doors. You got in, became a super-user, and
basically owned the network."

Kim's exploits made him seem dangerous and cool to his friends,
a hero. And the hacker scene fed perfectly into his sense of the
world as being us-versus-them.

The scam that got him arrested focused on the pay-by-the-minute
phone chat-lines popular in the early 90s. Kim set up his own party
line in the Netherlands Antilles. Then he generated massive caller
traffic using stolen calling-card numbers from the hacker bulletin
boards. He made more than 75,000 Deutschmarks (or about £120,000
today) but in 1993, three years into the scam, got caught. He was
arrested and spent four weeks in jail as a juvenile. Kim says he
was "scared to shit" in jail but found it interesting too. "I had
all these visitors, grown-ups from MCI and AT&T, coming just to
talk to me." He was shocked that these so-called experts from major
corporations had no idea how a PBX operated, much less how it could
be hacked.

"It was like I was speaking Chinese," Kim says. It was also a
potential business.

He joined up with fellow hacker and coding genius Mathias
Ortmann to form Data Protect, one of the world's first whitehat
consultancies, charging hundreds of dollars an hour to tell
businesses how to protect against people like themselves. Their
former colleagues in the hacker community thought of them as
traitors. Kim and Ortmann thought they were growing up.

The German media quickly discovered the teenage wunderkind, and
Kim discovered he enjoyed the spotlight. "They treated you like you
must be a fucking genius, man. But all I did, I scanned message
boards. I got passwords. Any monkey could do that. There was
nothing genius about it. But you get addicted to the headlines,
people saying nice things, telling you you're smart."

The gun was loaded: Kim had the needs of an outsider and the
cred of a rock star. He had contempt for the system and the tools
to beat it. By 1997 Kim took it upon himself to make his own
headlines, launching a website about his life and philosophy. He
called it Kimble, for his hacker name, Kimble -- as in The
Fugitive's Richard Kimble. "The internet was just ugly fonts
with underlined blue links," Kim says. "People would come to my
site, see it moving and animated and colourful, and think -- what
is this? They'd never seen anything like it." There were videos of
Kim, photos of Kim. Kim as an icon of success, an inspiration. Kim
with women. Kim in a black suit. Kim in a white suit. Kim on a jet.
He rounded out the site with motivational lists such as "Ten rules
of success".

By 2000, Kim had sold most of his stake in Data Protect and
started a private capital investment fund. He had particular
interest in a company called letsbuyit.com -- a sort of
proto-Groupon, ten years early. Kim invested in shares of the
company, believing that he could simplify its interface and make it
a success. Then he announced his plan to raise another $50 million
to fund it. The company stock jumped 220 per cent, and Kim sold
some shares at a profit.

He was accused of insider trading (he says he didn't consider
acting on his own plans to be insider trading and was committed to
the company) and the story of yet another crazy caper by Kim
Schmitz created a media frenzy. A German TV station sent a team to
interview the famous genius in his presidential suite at the
Bangkok Grand Hyatt. "I told them that if this is how Germany
treats their entrepreneurs, I don't know if I ever want to be in
Germany again. And that was a mistake."

The German embassy in Bangkok revoked his passport. Now Kim was
an illegal alien. Thai police cuffed him in his suite and led him
to an immigration prison. "This wasn't a normal jail," Kim says.
"This was fucking crazy. I'm thrown into a place, 18 guys sleeping
on a concrete floor, it's 40 degrees Celsius and smells like shit.
I've got mosquitoes eating me, the food comes in a
bucket."

Kim's lawyer told him he could fight in court and win - he'd be
out in a month. Kim hoped he was kidding. Germany was offering a
two-day travel document if he'd agree to come home. Kim said,
"Let's go." He was escorted on to a plane by two German policemen.
The press were waiting. This was big news in Germany. "My lifestyle
and kimble.org had painted a target on my back." They called him a
megalomaniac, a swindler, the "hacker king".

Kim was considered a flight risk and spent five months in jail
before being offered probation and a small fine if he'd plead
guilty. "I was tired," Kim says. "I knew I was finished in Germany
anyway." And he knew kimble.org was finished as well - there was no
chance of his being an inspiration to anyone now. "So I took the
deal. And there's nothing I regret more. Because if I hadn't pled,
I wouldn't have had that 'career criminal' label. And I wouldn't be
here today."

Comments

You know what's worse than a 280 kilo self-serving glutton?A corrupted, murderous government that believes it can extradite, rendition, prosecute and torture whomever it wants, from wherever it wants and for whatever it wants.I'll be following this case and supporting Mr. Dotcom until the very end.Great article.

Bill

Jan 1st 2013

In reply to Bill

^^^ That was a typo. I meant lbs not kilos. He's a big guy but not quite that big ;)

Bill

Jan 1st 2013

Quite a story. I do hope everything goes well for him.

Superdude

Jan 2nd 2013

I had no idea one could get so successful from file upload websites

Jim

Jan 2nd 2013

Kim's success is from a long line of successful endeavors. He didn't get to where he was from just File Upload sites. He kinda' has the Midas touch.I have been following his success since the 90's This isn't his first Rodeo. I hope it all works out for him. He's quite the entertaining guy and living (at least was) the life we all could have dreamed working in Tech.

Tiki

Jan 2nd 2013

Okay I knew I didn't like Kim Dotcom before, but this just disgusts me. I find it appalling to no end how much of a martyr he claims to be when he lives in such luxury. He's a greedy criminal who got caught. Enough said.

Michelle H.

Jan 3rd 2013

To Michelle H., I mostly with you on Kim Dotcom. I wasn't a fan of Megaupload initially. I'm not entirely sure why but it was a deep down feeling back then. I'm not sure if he's a criminal, but greedy? I don't know about that one. If he was as successful with different products other than merely Megaupload itself then he's just one of those individuals who managed to become successful through legal means. Does that somehow make him greedy? To me, no.

However the martyr thing... that helps to instill the feeling or aura about this Wired article that this is merely a puff piece in Kim Dotcom's favor. Anything to try to lull more customers in. PCWorld.com said in their article about Mega, Megaupload's successor, won't have the measures that Megaupload had. Kim Dotcom's more than happy to play ball with the Government more than ever now. They want YOUR information, he'll give them up without an arguement. Now enjoy your file sharing whether it's done legally or illegally! lol!